EU to Use All Trade Tools Against €1B Daily China Deficit

European Commission President Ursula von der Leyen stated that the European Union will deploy all available defensive instruments to address its unsustainable trade imbalance with China, which averaged €1 billion ($1.15 billion) daily last year and has driven concerns over domestic deindustrialisation.

"Let me be clear: we will use all the tools at our disposal to rebalance our relationship. Words are good. But deeds are better," said European Commission President Ursula von der Leyen.

Timeline for Trade Talks and Defensive Instruments

The policy push follows a mandate from EU leaders in June calling on the European Commission to ensure the 27-nation bloc possesses the necessary protective mechanisms to address market distortions. European Trade Commissioner Maros Sefcovic is currently leading high-level negotiations with Beijing, with the European Commission targeting tangible outcomes from the discussions by October.

New Critical Raw Materials Corporation

Alongside diplomatic talks, the European Union plans to establish a new European Corporation dedicated to critical raw materials. The state-backed entity aims to accelerate the procurement, stockpiling, and processing of rare earths and critical minerals, cutting the bloc's heavy import reliance on China.

What Is at Stake for European Industry

The widening trade deficit according to a Reuters report has intensified pressure on European policymakers to protect domestic manufacturing sectors, particularly clean energy technology and automotive supply chains, from heavily subsidized foreign competition.